London Wants to Get on the RMB Trading Bandwagon

To accompany today's other blog feature, may I just point out that it's not only the Asian crowd that wants to get on the RMB bandwagon. It may be confusing to my international readers, but to repeat, the Lord Mayor of London (Michael Bear) is different from the Mayor of London (Boris Johnson). The former represents merely the City of London where the financial services industry is concentrated, while the latter represents the much larger Greater London Authority. Moreover, the latter post was only created in the year 2000--the first directly elected mayor in the UK.

Unsurprisingly, one of the Lord Mayor of London's tasks is to represent the interests of the financial services industry. And what better cause is there than to make trading in the currency of the future available right here in old Europe? There's already a City of London Advisory Council for China to help promote this effort. From Dow Jones:

Mayor of the City of London Alderman Michael Bear said the city wants to be an offshore yuan center to take advantage of the internationalization of the currency, state-run Xinhua News Agency reported Wednesday. 'The yuan will become a meaningful component of international trade and even become an important reserve currency,' Bear said.

'Developing several offshore trading centers can help to enlarge the yuan market, with Hong Kong playing the role of pioneer. Singapore and New York also have opportunities to join the offshore yuan market. We hope and have confidence that London will join the market as soon as possible,' Bear was quoted as saying. Bear was on a business trip in Shanghai seeking to boost cooperation between the two cities in areas including financial services, shipping and education.

If and when London begins offering RMB for trade settlement, three of the four most cosmopolitan financial centres--London, Singapore, and Hong Kong--will be on board the RMB bandwagon. Whether out of pride or shortsightedness--I think it's a combination of both--the Americans aren't yet launching charm offensives aimed at a similar goal of obtaining the 21st century's currency. As if you needed any more reason to short America, short the dollar, and for the purposes of this article--short New York. It's a rapidly diminishing financial centre for a has-been nation that needs to begin sucking up to those who wear the pants in today's world economy.